Consequences of delay in Filing of Income Tax Return/ ITR

Taxpayers filing belated  tax return should be aware of the consequences owing to delay in filing of income tax return. 

Interest under Section 234A

If the taxpayer fails to furnish return within the stipulated time then interest u/s 234A is chargeable. The interest is chargeable on the amount of tax determined as reduced by the Advance Tax & Tax deducted at Source (TDS). Interest is charged @1% per month or part of the month from the due date of filing the return till the date of furnishing the return.

Set off and carry forward of Losses

Taxpayers filing belated return cannot carry forward business loss (Speculation or otherwise), capital loss (short term or long term) and loss due to owning and maintaining of race horses.

Return cannot be Revised

The revised return facility cannot be availed by the belated return filers. As per the Income Tax Act, after furnishing the return if an assessee discovers any omission or any wrong statement in the return filed, he may file a revised return, subject to the condition that, the original return was filed within due date.  So, even you discover any error on belated return filed you have no option to revise return.

Exemptions not available

If the income tax return is not filed within due date, exemption u/s 10A or 10B or deduction u/s 80IA, 80IB, 80IC, 80ID & 80IE are not allowed. In case the assessee is eligible for refund of tax, then he looses interest on the said refund u/s 244A owing to delay in filing the return, from the due date of filing the return till the date of furnishing the return.

All the taxpayer who desires to fully enjoy the benefits and avoid interest should file their Income Tax return on time.

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